Akur8 Bolsters Actuarial Arsenal with Arius Acquisition
Akur8 has recently announced the acquisition of Arius, a renowned reserving solution, from Milliman. This strategic purchase comes on the heels of a successful funding round that values the company at US$400mn.
The acquisition of Arius marks a significant expansion of Akur8's capabilities, particularly in loss reserving. Arius, known for its sophisticated stochastic reserving methodologies, will complement Akur8's existing suite of pricing tools, creating a more comprehensive actuarial platform. This integration is expected to streamline workflows for actuaries and underwriters, potentially reducing the time required for pricing and reserving processes by up to 10 times.
Samuel Falmagne, CEO at Akur8, emphasised the strategic importance of the acquisition, stating, "By integrating Arius into our platform, we're not just adding a tool; we're fundamentally enhancing our ability to serve insurers across the entire actuarial value chain. This move aligns perfectly with our mission to empower insurers with cutting-edge technology that drives efficiency and precision in risk assessment and pricing."
The technical integrations between Akur8's machine learning algorithms and Arius's stochastic reserving capabilities are particularly noteworthy. Akur8's proprietary algorithm, which uses Transparent Artificial Intelligence, can now be augmented with Arius's ability to generate multiple scenarios for future claim developments. This combination is expected to provide insurers with a more nuanced understanding of risk, potentially leading to more accurate pricing and reserving decisions.
Recent developments
Akur8's platform, which already boasts features such as GLM-boosting and SHAP values for interpretability, will now incorporate Arius's chain ladder and Bornhuetter-Ferguson methods for loss reserving. This integration is expected to create a seamless environment where pricing and reserving data can inform each other in real-time, potentially leading to more dynamic and responsive insurance products.
The company's growth trajectory has been impressive, with a reported 300% year-over-year increase in Annual Recurring Revenue (ARR) in 2023. This growth has been fueled by partnerships with major insurers across 18 countries, including Heritage Insurance in the United States. The Heritage Insurance collaboration announced recently, aims to leverage Akur8's technology to enhance pricing accuracy and speed-to-market for personal lines products.
Tim Teyber, SVP and Chief Actuary at Heritage Insurance, commented on the partnership: "Akur8's advanced machine learning capabilities align perfectly with our commitment to leveraging cutting-edge technology. We anticipate significant improvements in our pricing processes, which will ultimately benefit our policyholders through more tailored and competitive products."
Future Outlook
As Akur8 expands its capabilities, regulatory compliance remains a critical consideration. The company's emphasis on transparent AI aligns well with increasing regulatory scrutiny of AI-driven decision-making in financial services. The integration of Arius's well-established reserving methodologies may also help in navigating the complex regulatory landscape, particularly in markets with stringent actuarial reporting requirements.
Looking ahead, Akur8 is poised to capitalise on the growing demand for advanced actuarial tools in an increasingly data-driven insurance industry. The company's expanded platform is expected to address key challenges faced by insurers, including the need for more granular risk assessment, faster product development cycles, and improved loss ratio performance.
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